Midtown Office Building Snares $1M

PHOENIX-Generating five offers in just 24 hours on the market, a 12,300-sf midtown office building sells to a California investor for slightly more than $1.4 million in a sale/leaseback scenario that keeps a Mexican eatery’s headquarters in place.

“He absolutely wanted a single-tenant office building. There’s very little single-tenant product available in the market today so this fit his criteria,” Tim Rios, an associate at Marcus & Millichap in Phoenix, tells GlobeSt.com. Three of the five offers, including the buyer’s bid, met full listing price, he adds. Macayo’s Mexican Kitchen signed a five-year lease with two five-year options at $10 per sf triple net to hold onto a 17-year-old, class B office building at 3117 N. 16th St.

Buyer Gary Hedge of Tujunga, CA, obtained variable-rate financing in order to seal the deal. Rios says his previous relationship in securing another single-tenant office building in Phoenix bolstered Hedge’s bid for the acquisition. In February, Hedge struck a sale/leaseback with Zila Inc. for 5227 N. 7th St. in uptown Phoenix. The $1.8-million buyout of the pharmaceutical firm’s headquarters building marked Hedge’s first acquisition in the Phoenix market.

“We felt comfortable that because he had performed well in the past, we could go with him again,” adds Rios, who teamed with Chris Doty of Marcus & Millichap to represent the seller, MAC Properties LP of Phoenix. Another Marcus & Millichap team–Steve Gonzalez, Jamie Medress, Max Sharkansky and Edwin Voskanian–handled the deal on behalf of the buyer.